Barack Obama’s budget proposal pays for a healthcare plan — we don’t know yet what the plan is — with a carbon tax. Really.
Obama’s budget proposes a health care reform fund that would cost $635b over 10 years. Obama also proposes a cap-and-trade system that would generate $640b in revenue over 10 years.
So Obama wants to fund universal healthcare with a tax on carbon, wtih some administrative stuff on the other side to make the tax more complicated and harder for business to negotiate.
It is worth putting this in comparative perspective. Al Gore and the Liberal Party of Canada both had proposals for a carbon tax.
Gore proposed replacing the payroll tax with a carbon tax. The Tax Foundation noted Gore’s striking language at the time:
Former Vice President Al Gore has a novel approach for dealing with global warming: tax carbon dioxide emissions instead of employees’ pay.
“Penalizing pollution instead of penalizing employment will work to reduce that pollution,” Gore said Monday in a speech at New York University School of Law.
The carbon tax would replace all payroll taxes, including those for Social Security and unemployment compensation, Gore said. He said the overall level of taxation, would remain the same.
Obviously, this never came to a vote, but the idea has garnered some significant intellectual support. George W. Bush’s Chairman of Economic Advisors, Greg Mankiw, supports a stimulus that would replace the payroll tax with a gasoline tax.
In a meaningful sense, using the revenue to create universal healthcare is signficantly to the left of using it to lower the tax burden of all Americans.
Contrast it with the proposal of the Liberal Party of Canada, which proposed the "Green Shift", moving into the last election:
At the heart of the energy plan is an energy tax on carbon fuels, which will be based on consumption.
New taxes are expected to generate about $15.4 billion annually in revenue in four years. But the Liberals say their plan will be revenue neutral because it will cut income taxes and increase family support payments.
Dion said his plan is "as powerful as it is simple."
"The Liberal Green Shift will cut taxes on those things we all want more of — such as income, investment and innovation — and shift those taxes to what we all want less of: pollution, greenhouse gas emissions and waste."
However, the Conservative Party of Canada successfully branded this idea, the "permanent tax on everything", and this issue was part of the reasons that the LPC lost the most recent election there and Stephane Dion, its primary advocate, was forced to step down as party chair.
So let’s make this really clear. Obama’s plan is significantly to the left of something that failed miserably in Canada. How’s it going to play in the states?
As always, Newt Gingrich is leading the way on messaging:
"Let me get this straight," said Gingrich. "We’re not going to raise tax on anybody making under $250,000 a year unless you use electricity. And we are not going to raise taxes on anybody under $250,000 a year unless you buy gasoline. And we are not going to raise taxes on anybody who makes under $250,000 a year unless you buy heating oil. And we’re not going to raise taxes on anybody who earns less $250,000 a year unless you use natural gas."
"And I try to think to myself," he added, "even in the left wing of the Democratic Party, where there are some people who are fairly unusual, how many of them don’t use heating oil, natural gas, gasoline or electricity?"
If Obama is lying like this, and the left couldn’t win a fight significantly to the right of this one in Canada with a significantly healthier economy, I think that we can win this fight here.